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Alcoa (AA)
NYSE:AA
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Alcoa (AA) AI Stock Analysis

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AA

Alcoa

(NYSE:AA)

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Outperform 75 (OpenAI - 4o)
Rating:75Outperform
Price Target:
$42.00
▲(17.81% Upside)
Alcoa's overall stock score reflects a strong financial recovery and positive technical indicators, which are the most significant factors. While the valuation is reasonable, the mixed sentiment from the earnings call and past volatility in financial performance slightly temper the outlook.
Positive Factors
Operational Efficiency
The investment in modernizing the Massena smelter, supported by a new energy contract, enhances operational efficiency and sustainability, which can lead to long-term cost savings and improved production capabilities.
Strategic Partnerships
The strategic partnership for gallium plant development strengthens Alcoa's position in the critical mineral supply chain, potentially opening new revenue streams and enhancing market competitiveness.
Revenue Growth
Increased revenue in the Aluminum segment, driven by higher prices, indicates strong demand and pricing power, contributing to sustained revenue growth and profitability.
Negative Factors
Revenue Decline
The decline in revenue due to lower alumina prices and volumes highlights challenges in maintaining growth momentum, which could impact future financial performance if not addressed.
Increased Tariff Costs
Rising tariff costs on aluminum imports increase operational expenses, potentially squeezing margins and affecting the company's competitive position in the U.S. market.
Workplace Safety
The workplace fatality underscores the importance of safety, which, if not improved, could lead to operational disruptions, regulatory scrutiny, and reputational damage.

Alcoa (AA) vs. SPDR S&P 500 ETF (SPY)

Alcoa Business Overview & Revenue Model

Company DescriptionAlcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses. The company offers primary aluminum in the form of alloy ingot or value-add ingot to customers that produce products for the transportation, building and construction, packaging, wire, and other industrial markets. In addition, it owns hydro power plants that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyAlcoa generates revenue primarily through the sale of aluminum and alumina, with its revenue model primarily based on the production and distribution of these core products. Key revenue streams include the sale of primary aluminum, alumina, and fabricated aluminum products, as well as aluminum recycling services. The company benefits from long-term contracts with major customers in the aerospace and automotive industries, which provide stable revenue sources. Additionally, Alcoa's operational efficiency and focus on cost management contribute to its profitability. The company also engages in strategic partnerships and joint ventures that enhance its market reach and operational capabilities, further contributing to its earnings.

Alcoa Key Performance Indicators (KPIs)

Any
Any
Sales by Segment
Sales by Segment
Chart Insights
Data provided by:Main Street Data

Alcoa Earnings Call Summary

Earnings Call Date:Oct 22, 2025
(Q3-2025)
|
Next Earnings Date:Jan 21, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted several strategic advancements, including record aluminum production and significant investments in energy efficiency and critical mineral supply chains. However, these positive developments were tempered by challenges such as a workplace fatality, revenue declines, and increased tariff costs. While Alcoa made progress in some areas, the financial results were mixed, with an adjusted net loss reported. The sentiment is balanced, reflecting both achievements and challenges.
Q3-2025 Updates
Positive Updates
Record Aluminum Production
Achieved year-to-date aluminum production records at five smelters, contributing significantly to the bottom line.
Strategic Gallium Plant Development
Announced funding from the U.S. and Australian governments to develop a gallium plant at the Wagerup alumina refinery in Australia, reinforcing Alcoa's role in the critical mineral supply chain.
New Long-Term Energy Contract
Secured a new long-term energy contract for the Massena operations, along with a $60 million investment in the anode bake furnace, enhancing operational efficiency.
Increased Aluminum Segment Revenue
Third-party revenue in the Aluminum segment increased by 4% due to higher average realized prices, despite lower shipments.
Net Income Increase
Net income attributable to Alcoa increased to $232 million compared to the prior quarter's $164 million, with earnings per share rising to $0.88.
Negative Updates
Workplace Fatality
A fatal incident at the Alumar smelter led to a comprehensive safety review, highlighting the critical importance of safety.
Revenue Decline
Overall revenue decreased by 1% sequentially to $3 billion, impacted by lower alumina prices and volumes.
Alumina Segment Challenges
The Alumina segment saw a 9% decrease in third-party revenue due to lower bauxite offtake volumes and prices.
Adjusted Net Loss
On an adjusted basis, Alcoa reported a net loss attributable to Alcoa of $6 million, or $0.02 per share.
Increased Tariff Costs
Higher U.S. Section 232 tariff costs on aluminum imports from Canadian smelters led to a decrease in adjusted EBITDA by $43 million.
Company Guidance
During Alcoa Corporation's third quarter 2025 earnings call, several key metrics and guidance points were provided. The company reported a sequential revenue decrease of 1% to $3 billion, while third-quarter net income attributable to Alcoa was $232 million, up from $164 million in the prior quarter, with earnings per share increasing to $0.88. Adjusted EBITDA stood at $270 million, though it was impacted by increased U.S. Section 232 tariff costs and adjustments to asset retirement obligations. Capital expenditures rose to $151 million, and the company closed the quarter with $1.5 billion in cash. Looking forward, Alcoa anticipates higher shipments and a sequential release of working capital in Q4, with tariff costs projected to increase by approximately $50 million due to increased shipments. The company adjusted its full-year 2025 outlook, reducing CapEx to $625 million and eliminating income tax payments due to a favorable tax refund. The Alumina segment is expected to improve by $80 million, while the Aluminum segment may see a $20 million unfavorable impact. The company remains focused on increasing profitability and operational excellence, with strategic investments such as a new long-term energy contract and a $60 million investment in the Massena operations.

Alcoa Financial Statement Overview

Summary
Alcoa's financial performance shows a strong recovery with improvements in profitability, leverage, and cash flow metrics. The company has managed to enhance margins and cash generation, although past volatility remains a risk.
Income Statement
Alcoa's income statement shows a strong recovery with a TTM revenue growth rate of 1.45% and significant improvements in profitability metrics. The gross profit margin increased to 18.70% in TTM, and the net profit margin rose to 7.66%, indicating enhanced operational efficiency. EBIT and EBITDA margins also improved, reflecting better cost management. However, the company experienced volatility in previous years, with negative net income in 2022 and 2023, which could pose a risk if not managed well.
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.43 in TTM, showing a manageable level of leverage. The return on equity improved significantly to 17.96%, indicating effective use of equity to generate profits. The equity ratio is healthy, suggesting a solid capital structure. However, the company needs to maintain this trajectory to mitigate past fluctuations in equity returns.
Cash Flow
Alcoa's cash flow statement highlights robust growth in free cash flow, with a TTM growth rate of 67.24%. The operating cash flow to net income ratio is 0.34, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 0.52 suggests efficient cash conversion. Despite past challenges, the recent improvements in cash flow metrics are promising for future liquidity and investment capacity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue13.10B12.18B10.71B12.76B12.44B9.37B
Gross Profit2.45B1.50B241.00M1.93B2.62B765.00M
EBITDA2.17B1.09B155.00M1.43B2.06B972.00M
Net Income1.00B60.00M-651.00M-123.00M429.00M-170.00M
Balance Sheet
Total Assets14.99B14.06B14.15B14.76B15.03B14.86B
Cash, Cash Equivalents and Short-Term Investments1.51B1.14B944.00M1.36B1.81B1.61B
Total Debt2.65B2.82B1.97B1.87B1.87B2.62B
Total Liabilities8.76B8.91B8.31B8.17B8.74B9.84B
Stockholders Equity6.13B5.16B4.25B5.08B4.67B3.31B
Cash Flow
Free Cash Flow582.00M42.00M-440.00M342.00M530.00M41.00M
Operating Cash Flow1.12B622.00M91.00M822.00M920.00M394.00M
Investing Cash Flow-567.00M-608.00M-585.00M-495.00M565.00M-167.00M
Financing Cash Flow-468.00M201.00M57.00M-768.00M-1.16B514.00M

Alcoa Technical Analysis

Technical Analysis Sentiment
Positive
Last Price35.65
Price Trends
50DMA
33.11
Positive
100DMA
31.28
Positive
200DMA
31.18
Positive
Market Momentum
MACD
1.19
Negative
RSI
52.55
Neutral
STOCH
53.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 35.65 is above the 20-day moving average (MA) of 35.29, above the 50-day MA of 33.11, and above the 200-day MA of 31.18, indicating a bullish trend. The MACD of 1.19 indicates Negative momentum. The RSI at 52.55 is Neutral, neither overbought nor oversold. The STOCH value of 53.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Risk Analysis

Alcoa disclosed 28 risk factors in its most recent earnings report. Alcoa reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Alcoa Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$9.64B9.5520.01%1.07%21.32%
72
Outperform
$6.50B78.991.99%1.21%-1.61%-81.36%
70
Outperform
$9.69B92.464.67%0.20%36.30%
68
Neutral
$1.29B20.558.89%3.95%4.62%56.04%
68
Neutral
$2.89B26.0517.74%15.39%-47.91%
61
Neutral
$10.43B7.12-0.05%2.87%2.86%-36.73%
58
Neutral
$2.23B82.943.02%2.52%-83.35%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AA
Alcoa
35.65
-5.71
-13.81%
CENX
Century Aluminum
28.96
12.14
72.18%
CMC
Commercial Metals Company
62.05
11.52
22.80%
HL
Hecla Mining Company
12.99
5.86
82.19%
KALU
Kaiser Aluminum
77.90
13.21
20.42%
CSTM
Constellium
15.66
4.93
45.95%

Alcoa Corporate Events

Alcoa Reports Strong Q3 2025 with Strategic Moves
Oct 23, 2025

Alcoa Corporation is a leading global producer of bauxite, alumina, and aluminum products, known for its commitment to operational excellence and sustainability in the metals industry. In its third-quarter 2025 earnings report, Alcoa Corporation announced increased production in its alumina and aluminum segments, alongside significant one-time financial impacts due to strategic restructuring and asset sales. The company reported a net income of $232 million, driven by a substantial gain from the sale of its interest in a joint venture with the Saudi Arabian Mining Company, offset by restructuring charges from the closure of its Kwinana refinery in Australia. Alcoa also set production records at several smelters and secured a new energy contract for its Massena smelter in New York, reflecting its strategic focus on operational stability and portfolio optimization. Looking ahead, Alcoa’s management remains focused on enhancing profitability through safety and continuous improvement initiatives, while advancing mine approvals in Australia and exploring new opportunities in the gallium market.

Business Operations and Strategy
Alcoa Announces Permanent Closure of Kwinana Refinery
Negative
Sep 30, 2025

On September 29, 2025, Alcoa Corporation announced the permanent closure of its Kwinana alumina refinery in Western Australia, which had been fully curtailed since June 2024. The decision was influenced by factors such as the refinery’s age, operating costs, and market conditions. The closure will result in restructuring charges of approximately $890 million, with cash outlays expected to reach $600 million over six years. The refinery’s closure will impact approximately 220 employees, with severance costs previously recorded in 2024.

The most recent analyst rating on (AA) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 23, 2025